Bitcoin whipsawed again after Thursday’s soft inflation report signaled a recovery, triggering over $500 million in crypto liquidations.

With headline and core inflation coming in at 2.7% and 2.6%, respectively, below 3% forecasts, the crypto market outlook seemed bullish. Bitcoin even came close to revisiting $90,000, but sellers stepped up again, undoing the gains in a few hours.

Per CoinGlass data, the crypto market saw $575 million in liquidations over the past 24 hours, of which $368 million were long positions. Bitcoin accounted for $202 million of the liquidated positions, with $119 million of longs liquidated.

Unlike the Wednesday whipsaw, where spot investors drove the price lower, the recent reversal was also driven by profit-taking from derivatives investors, per Velo data.

Despite the washout, the $85,000 to $81,000 range has been a good source of demand. Bitcoin is up nearly 1% over the past 24 hours and is currently trading at around $88,100, according to CoinGecko data.

Traders on prediction market Myriad, owned by Decrypt‘s parent company Dastan, remain optimistic, placing a 61% chance on Bitcoin’s next move taking it to $100,000 rather than $69,000.

The Bank of Japan raised its interest rate by a quarter point on Friday, ending a 30-year low rate regime, likely adding pressure on crypto and other risk assets, according to a previous Decrypt report.

The historic decision puts pressure on the carry trade that has been ongoing for decades. As a result, the subsequent unwinding of the carry trade post-rate hike will halt the liquidity that has greased risk assets for years.

Regardless of the catalyst, leverage remains elevated in the crypto ecosystem. Reflecting this, there have been four days in December when total crypto market liquidations have surpassed $500 million.

A closer look at liquidation data shows that optimistic investors’ long positions have been a major contributor to the total liquidations, per Coinalyze.

With the holidays fast approaching, volatility is likely to ramp up as liquidity shrinks and investors rebalance portfolios.

The reduced spot demand and defensive positioning among futures and options traders will only amplify these conditions.